Around $400 billion has exited the crypto asset space since Friday in what has been one of the largest mass selloffs of coins and tokens.
Total market capitalization had fallen to a three-month low of $1.45 trillion during Monday morning’s Asian trading session. The massive correction has seen markets dump around 43% since their peak of $2.55 trillion on May 12.
Bitcoin has led the slump, as usual, dropping 6% on the day in a fall to $35,000 at the time of press. BTC hit an intraday low of $31,400 on Sunday but has managed to recover a little since then.
Chinese Miners Down Tools
The fear and uncertainty has stemmed from China as usual and its latest crackdown on Bitcoin mining operations. According to a Reuters report on Monday, crypto mining pools HashCow and BTC.TOP, have halted their China operations after Beijing intensified its embargo.
The clampdown was announced on Friday by a State Council committee led by Vice Premier Liu He. BTC.TOP, a leading crypto mining pool, announced the suspension of its China business citing regulatory risks, while crypto miner HashCow said it would halt buying new Bitcoin rigs.
Chen Jiahe, chief investment officer of Beijing-based Novem Arcae Technologies explained:
“Crypto mining consumes a lot of energy, which runs counter to China’s carbon neutrality goals,”
Huobi Mall said in a statement on Monday that it has also suspended crypto mining services to mainland Chinese clients, and will focus on overseas businesses.
China is currently responsible for an estimated 60% of the total hash power and industry observers have speculated that this decline in reliance on China could actually be good for the crypto industry in the long term. BTC.TOP founder Jiang Zhuoer admitted that eventually, China will lose crypto computing power to foreign markets.
Chief Strategy Officer at the Human Rights Foundation, Alex Gladstein, commented that the mining focus will pivot to North America. The majority of it currently takes place in Texas due to its favorable energy costs and the fact the most of it is renewable.
“In the long term nearly all Chinese crypto mining rigs will be sold overseas as regulators crack down on mining at home”— Alex Gladstein (@gladstein) May 24, 2021
Quote from https://t.co/2R3vAChpfQ (pool w/ ~2% global hashrate) which just suspended its China business.
They say they will focus on mining in N. America. https://t.co/xeWhbjVEBI
Chinese Tokens Dumping Hard
Local media outlet Wu Blockchain observed that most of the crypto assets with the largest declines have been ones favored by Chinese investors.
Most of the coins with the largest decline in 7days are cryptocurrencies initiated by or mainly invested by Chinese people. pic.twitter.com/DAOh7baowx— Wu Blockchain (@WuBlockchain) May 24, 2021
At the time of press the crypto assets still taking the biggest beatings were Dogecoin, XRP, Polkadot, ICP, and Uniswap – all dumping double digits still.